The financial statements for Castile Products, Inc., are given below:

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash	$	22,000
Accounts receivable, net		240,000
Merchandise inventory		330,000
Prepaid expenses		11,000
Total current assets		603,000
Property and equipment, net		860,000
Total assets	$	1,463,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities	$	260,000
Bonds payable, 8%		340,000
Total liabilities		600,000
Stockholders equity:
Common stock, $10 par value	$	140,000
Retained earnings		723,000
Total stockholders equity		863,000
Total liabilities and stockholders equity	$	1,463,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	4,230,000
Cost of goods sold		1,428,000
Gross margin		2,802,000
Selling and administrative expenses		620,000
Net operating income		2,182,000
Interest expense		27,200
Net income before taxes		2,154,800
Income taxes (30%)		646,440
Net income	$	1,508,360

Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $350,000. All sales were on account.